Why do people say “GDP can be misleading”?

Video: Below is the simplest and clearest way to explain it to you: 🧨 Why do people say “GDP can be misleading”? 下面用最簡單、最清楚的方式告訴你：🧨為什麼說「GDP會騙人」？
Because nominal GDP (measured using market exchange rates) is easily distorted by the following three factors:

① Exchange rate fluctuations → Make a country’s GDP appear larger or smaller
• The same economic output can look bigger or smaller simply because the exchange rate changes.
• Example:
If the RMB depreciates by 10%, China’s nominal GDP in U.S. dollars will suddenly “shrink” by 10% in international statistics—
even though domestic production didn’t change at all.

② Huge price differences between countries

A bowl of noodles costs $12 in the U.S. but maybe $1 in India.
If you compare GDP using market exchange rates, you undervalue countries with low prices.

Therefore:
• Developing countries: GDP is undervalued
• Developed countries: GDP is overvalued

That’s why many say:

Nominal GDP only reflects “how much you can buy with U.S. dollars,”
not the actual economic output inside the country.

③ It cannot compare people’s living standards at all

Nominal GDP cannot measure:
• How much people can buy
• Purchasing power of wages
• Differences in living costs

For example:
• $1,000 lasts only a few days in Switzerland
• $1,000 can support a whole month in Vietnam

Comparing both using the same dollar value makes no sense, right?

🌍 So is PPP (Purchasing Power Parity) more reliable?

Many economists say:

PPP is the correct way to compare real living standards and real economic size across countries.

Here’s why:

① PPP removes the impact of exchange rates

PPP uses a globally standardized basket of goods to measure value.
Meaning:

✔ It ignores exchange rates
✔ It focuses only on how much things actually cost in each country

This makes cross-country comparison “clean,” unaffected by currency markets.

② PPP reflects “real purchasing power”

PPP measures:

How many goods and services people can buy with their own currency.

So it can measure:
• Cost of living
• Real wage levels
• Domestic market size
• Actual contribution of domestic industries

③ PPP measures countries’ real economic strength more accurately

According to the IMF and World Bank:
• China has been the world’s largest economy (PPP) since 2014
• India ranks third globally in PPP (higher than its nominal GDP ranking)

This shows:

PPP presents the real economic strength of populous countries with lower costs.

🔍 A simple analogy: nominal GDP vs PPP

Nominal GDP is like comparing how much money people have “in their bank accounts in U.S. dollars.”
→ Affected by exchange rates, doesn’t show real living ability.

PPP is like comparing “how much food, clothing, and services each person can actually buy.”
→ Reflects real living standards and economic strength.

📌 Summary: Nominal GDP can mislead you, but PPP does not

因為 名目GDP（按市場匯率計算） 很容易受以下三件事扭曲：

① 匯率波動 → 讓一國GDP看起來忽大忽小
• 同樣的經濟規模，只因匯率波動，就可能讓GDP變大或變小。
• 例子：
如果人民幣貶值 10%，中國的名目GDP（以美元計）就會在國際統計中突然「縮水」10%，
但國內生產一點也沒變！

② 不同國家物價差異非常大

一碗麵在美國 12 美元，在印度可能 1 美元。
用市場匯率比較 GDP，就會把便宜國家的經濟「低估」。

因此：
• 開發中國家：GDP被低估
• 發達國家：GDP被高估

這就是為什麼很多人說：

名目 GDP 只反映「你用美元能買多少東西」，
不反映「你國內經濟的實際產出」。

③ 人民生活水準完全比較不出來

名目GDP 無法衡量：
• 人民能買多少東西
• 工資購買力
• 生活成本差異

例如：
• 1,000 美元在瑞士只夠生活幾天
• 1,000 美元在越南可以生活一整個月

用同樣美元衡量，是不是根本沒有意義？

🌍 所以 PPP（購買力平價）比較可靠？

非常多經濟學家都說：

PPP 才能比較不同國家「真實生活水準」與「真實經濟規模」。

原因如下：

① PPP 排除匯率影響

PPP 使用「全球統一的物價籃子」來衡量。
也就是說：

✔ 不看匯率
✔ 只看在各國購買同樣物品需要花多少錢

這讓比較變得「乾淨」、不被外匯市場干擾。

② PPP 反映「實際購買力」

PPP 計算的是：
一國人民用本國貨幣能買到多少商品與服務。

所以它能衡量：
• 生活成本
• 真實工資水準
• 內需市場規模
• 國內產業實際貢獻

③ PPP 更準確衡量世界各國經濟實力

根據 IMF 與世界銀行：
• 中國經濟規模（PPP）自 2014 年起全球第一
• 印度 PPP 規模全球第三（高於名目GDP的低估）

這些都反映出：

PPP 更準確呈現人口大國與成本較低國家的真實經濟力量。

🔍 名目 GDP vs PPP 的一看就懂比喻

名目GDP像比較每個人「用美元存在銀行的錢」。
→ 會被匯率影響，不反映真實生活能力。

PPP則像比較每個人「能買多少食物、多少衣服、多少服務」。
→ 能反映真實生活與經濟實力。

📌 總結：GDP 會騙人，但 PPP 不會